Expert Insight

By Robert Copeland
SVP Product Strategy & Business Development

TradeCard, Inc.

Date: November 4, 2010

Three Ways To Remove Days & Dollars From Your Supply Chain In 2011

Three Ways To Insert Speed And Transparency Into Your Supply Chain

Supply chains continue to fight an uphill battle against pressures coming from two different directions. On one side there's uncertainty around consumer spending, as bargain shopping continues to be the trend into the holiday season. On the other side of business, rising costs pose enormous risk across the supply chain. Costs of raw materials, labor and transportation continue to shrink margins. How can your supply chain proactively address pressures and risk in 2011? Here are three ways to insert speed and transparency into your supply chain to reduce risk and costs related to overhead, processing and capital.


Cut Out Layers in Your Supply Chain

Shipping direct to store, cross-docking and other programs can bypass the DC to eliminate costs and deliver goods in less time. Along the same lines, take steps to stay close to the source overseas. Perform customization or other services overseas. Reducing domestic inventory and going direct to store eliminates time and costs from your supply chain.

Allow Suppliers to Take Advantage of Your Financial Strength to Lower Costs

Retailers and buyers tend to be financially stronger than their suppliers. A fast way to remove costs from the supply chain, while eliminating delays and capital related risk, is to help them out through early payments in exchange for invoice discounts. Your suppliers in regions such as Bangladesh and Turkey might be paying 12 to 15% interest rates. Allow your suppliers to take advantage of your credit rating. Offer early payment invoice discounting programs that help suppliers get paid quicker. If you fund it yourself, you can offer 7 or 8% rates and both sides win. I
f a financial institution funds it, there’s no involvement or burden on the buyer and more flexibility for the supplier.


Materials represent one of the largest costs and longest drivers of lead times in your supply chain. Consider consolidating materials usage across your company to leverage common materials where possible. Negotiate prices directly for those common materials to leverage the size of your spend and ensure materials are not a profit center for your suppliers. Help ensure the best possible price for your suppliers. Positioning these common materials can also increase the responsiveness of your supply chain, allowing later product and inventory decisions. 


Change How You Transact

Conduct a paper assessment and change how you communicate and transact. Do you still rely on paper? Email? Fax? If so, there's likely to be significant errors and delays from manual keying and paper shuffling. Eliminate paper and manual processes and automate communication. And not just with your key suppliers - automate transactions with your entire supply network. Even if you're using portals, there's significant room for improvement.
Imagine leveraging the power and agility of a social network transformed into a business environment. An update to a transaction is made by one of the participants and immediately all relevant parties are informed and can proactively collaborate with each other. Picture the same purchase order or set of data being worked from at all parties, across raw materials providers, manufacturers, freight providers, trade finance providers, agents, customs, and others.

Final Thoughts

Some of these supply chain changes may appear to require massive projects that involve extensive time and technology resources. But that’s no longer the case, given the recent emergence of cloud technology solutions in the supply chain. Cloud technology can change the way we conduct business and communicate with our trading partners. Many supply chain innovators today are harnessing the power of cloud supply chain networks that are already built and connected to thousands of players. A cloud-based platform and network can be the foundation of your collaborative supply chain to enable these three steps. Specifically, it can be the key to:

  • Changing how you transact by automating documents and complex workflows across multiple parties
  • Reducing weeks from cycle times by providing the necessary resources to ship direct or label at the factory
  • Eliminating costs from the supply chain through efficiency and cost-of-capital reduction

Rapid deployment and fast ROI make cloud an attractive model for today’s complex supply chains. One of the few safe bets in today’s uncertain times. 

Agree or disagree with with our guest contributor's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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About the Author

Mr. Bob Copeland heads TradeCard's emerging product strategy to enable retail and consumer goods companies to capitalize on cloud technology in the supply chain to improve visibility, agility and margins. Mr. Copeland brings to TradeCard more than 20 years of supply chain consulting knowledge and insight from strategic initiatives facilitated at companies such as Target, Macy's, Avon and Adidas.

Prior to joining TradeCard, Mr. Copeland worked at Kurt Salmon Associates where he led numerous supply chain initiatives at retailers and brands and managed relationships with analysts and software partners.

Mr. Copeland is the past chairman of the Supply Chain Leadership Committee of the American Apparel and Footwear Association and is on the Editorial Advisory Board of Apparel Magazine.

Copeland Says:

Rapid deployment and fast ROI make cloud an attractive model for today's complex supply chains.

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